Most of the diving in CSL is boat dives departing from the Marina. The former Plaza Las Glorias (now Costa Real) is a nice hotel right above the Marina. Unfortunately, no beaches at the Marina.
In town, some of the other nice waterfront hotels include the Solmar at Finisterra (nice beach but too much surf/current for swimming) & the Pueblo Bonito Sunset Beach (a good walk up and down the hill to town; better to take the free PB shuttle bus. Same comments regarding beach as Finisterra).
There's a whole row of hotels/condo complexes along Medano beach, starting with the Hacienda, then the two Pueblo Bonito (Rose & Blanco), Melia San Lucas, the Club Cascadas condo, then, Villa Del Palmar and its sister property Villa Estancia. As you proceed logical North along Medano beach, you then get to the architectural monstrosity known as the Riu. The Riu is very new, and you might be able to snarf some really good specials (at the cost of listening to their timeshare presentation). The surf along Medano beach is almost always low, and most water sport activities (e.g. parasail, jetski, etc.) launch from Medano beach. There are three scuba outfitters that I know of who launch from Medano beach; Manta (I think), which launches from near the Pueblo Bonitos, and Cabo Acuadeportes, which is at the Hacienda. These are old, well known outfitters. The Riu has its own scuba outfitter (at least, on paper. They may be contracting with the divers in town).
With none of the above-mentioned hotels/resorts do you need a car (though depending on your vacation plans, you may want one). If my memory doesn't play tricks on me, the Pueblo Bonitos, Melia, Club Cascadas, VDP, and VLA offer rooms which are more condo-like than hotel-like (e.g. fridge, kitchenette), and you may choose to buy groceries and cook-your-own instead of cooking. For the Riu, cooking is fairly pointless since it's an all-inclusive resort.
As you head North towards San Jose Del Cabo (locals call it San Jose), you find a string of upscale condos or resort hotels, starting with Missiones Del Cabo, and ending at San Jose with the One-And-Only-Palmilla (there are more accommodations in San Jose, upscale and downscale). These all feature designer golf-courses, "5-star" architects, etc. The rooms (except maybe for the all-inclusives or the older properties) include kitchenettes. While these resorts may offer shuttles to town, I would consider a car a necessity. Many offer a choice of studio, 1BR, & 2BR (sleep 2, 4, and 6) accommodations. For 8, you may want to get 2 1BR's (depending on how friendly you are). We return to the Hilton, which is very family-friendly (not to say that the others aren't, but we really liked the Hilton's kids program).
There are a few houses for rent at Playa Santa Maria. Sorry, can't recall the web site, but quite upscale, and definitely on the beach. (Very nice beach too).
I like "www.allaboutcabo.com" as a pretty good website. I like Moon's guide to Cabo/Baja.
Nick-San does have good sushi, but my wife & I really like the new sushi chef at Solomon's Landing (right in front of Land's End Divers).
We think the pastry chef at the Sea Queen restaurant makes desserts that are better than anything we've had in the US, and rivals French & Austrian desserts.
We love the "Huachinango Entero" at the Fish House.
A day trip (or two) to San Jose, which is more historic, and to Todos Santos, which is quaint, is well worthwhile for non-divers.
If your idea of fun for nondivers is vegging out on a hammock all day, you might consider trying to find a beach house on the East Cape (Los Barrilles, La Ribera, etc. heading towards Cabo Pulmo). You'll have the beach all to yourself. (Downside: If you didn't bring or buy enough supplies, you've got a *LONG* schlep!)
Have fun!
